Bitcoin and Ethereum correlation plunges to lowest since 2021

Kaiko Research highlighted that the correlation between Bitcoin and Ethereum has dropped below its average of 0.71 for the first time since 2021. 

This development comes amidst a broader market downturn, with BTC and ETH prices falling nearly 6% over the past week, currently at $40,991 and $2,463, respectively.

Historically, BTC and ETH have demonstrated a strong correlation in their market movements. However, the recent divergence raises questions about Ethereum’s future trajectory, especially in light of its trade volume surge without corresponding signs of a rally in the derivatives market. This phenomenon contrasts sharply with the BTC market, which saw significant growth in anticipation of ETF approvals.